New phase for micro-gen grants but no new cash

The second batch of micro-renewables grants is now available, the DTI announced on Monday - but with no extra funds, despite the stark warnings of the Stern review and Britain's growing enthusiasm for small-scale renewables.

A total of £50m in grants will part-fund micro-renewable installations over the next 18 months, industry secretary Alistair Darling said as he launched the second phase of the Low Carbon Buildings Programme.

The money is part of the £80m made available under the LCBP last March, so far used to pay for 30-50% of micro-renewables installations in schools, public buildings and individual households.

High demand from householders led to the £6.5m funding stream destined for individual homes unexpectedly running out of cash, with the DTI forced to fill the gap with funds from other parts of the £80m programme.

Meanwhile the Treasury-commissioned Stern review of climate change, which concluded that investments needed now to avert runaway global warming were insignificant compared to the costs of a business-as-usual scenario, called for a significant expansion of renewable generating capacity:

"Large-scale uptake of a range of clean power, heat and transport technologies is required for radical emission cuts in the medium to long term. The power sector around the world will have to be at least 60%, and perhaps as much as 75%, decarbonised by 2050 to stabilise at or below 550ppm CO2e [CO2 equivalent]," Nicholas Stern wrote.

Launching the second phase of the low carbon buildings programme, Alistair Darling echoed Stern's findings: "It is vital that we cut the CO2 emissions from our buildings if we are to reach the UK's 60% reduction target by 2050. Combining energy efficiency measures with the fitting of microgeneration technologies on schools and other public sector buildings can and will make a real difference."

"The selling of any excess electricity produced by these technologies back to the National Grid is yet another benefit of having them installed and the scrapping of income tax on re-sales announced in the Pre-Budget Report is a real incentive to increasing local level energy production.

"We can now enable suppliers to bring costs down for the benefit of consumers and make the investments required to further develop the industry," he said.

But the DTI failed to top up the funds available under the scheme despite strong interest in the past and calls for more Government investment in low-carbon technologies from green groups.

Technologies that qualify for the grants scheme include solar PV, solar thermal, ground source heat pumps, wind and biomass. Local authorities and schools are eligible for grants that cover 30% of the costs of these technologies, except for costly solar PV for which grants can cover to 50% of the price.

The second phase of the LCBP will be administered by consultancy BRE, and the technologies provided by seven licenced companies - Dulas, Solar Century, BG, Filsol, Glen Dimplex, Eon and RES.